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Blackstone Secures Option to Acquire Major Nickel Asset
HIGHLIGHTS
- Blackstone has executed an option agreement to acquire 100% of the Wabowden nickel sulphide project located in the world-class Thompson Nickel Belt in Manitoba, Canada.
- Attractive opportunity for Blackstone given large scale resource base, established infrastructure, low- cost hydro power and synergies with Blackstone’s other strategic nickel interests in Manitoba.
- Wabowden is well matched to Blackstone’s expertise and integrated nickel strategy.
- Large scale resource base of 230Mt at 0.56% nickel for 1.3Mt of contained nickel1, with significant growth potential. 1 The Mineral Resource Estimate is a Foreign Resource Estimate and has been prepared in accordance with the Canadian National Instrument 43-101. A competent person has not done sufficient work to classify the foreign estimate as a mineral resource in accordance with the JORC Code 2012, and is uncertain whether further evaluation and exploration will result in an estimate reportable under the JORC Code 2012.
- Includes the well-maintained Bucko mine and processing facility which retains key operating permits.
- The acquisition of Wabowden would provide Blackstone significant optionality and can remove
- Blackstone’s need to secure third-party feed to fill its Ta Khoa Refinery for multiple decades.
- Ability to benefit from Manitoba’s Critical Minerals Strategy and USA’s Inflation Reduction Act (“IRA”).
- Strategic 12-month option for cash payment of C$1.1 million.
- Option period provides Blackstone the ability to optimise various development and funding pathways including joint venture partnerships, government funding, royalty, debt and equity opportunities.
- Effective total acquisition cost of only A$0.03 per pound of nickel provides significant value opportunity for a re-rate in value.
- Blackstone undertaking an accelerated non-renounceable pro rata entitlement offer to raise up to approximately A$10.2 million.
- Proceeds to support Wabowden option opportunity, complete the Definitive Feasibility Study (“DFS”) for Blackstone’s Ta Khoa Refinery and progress Blackstone’s strategic partnerships process.
For a video summary of the announcement head to the Blackstone Investor Hub by clicking here
Figure 1: Wabowden Project – Bucko Mine and Processing Facility
Blackstone Minerals’ Managing Director, Scott Williamson, commented:
“Wabowden is one of the most advanced nickel sulphide projects in North America today and is highly complementary to our plans for the Ta Khoa Refinery in Vietnam, making it a transformative and compelling growth opportunity for Blackstone.
With a resource of 1.3 million tonnes of contained nickel, Wabowden would substantially increase our global mineral resource and could secure all the feed required for the Ta Khoa Refinery, removing our dependency on sourcing third-party feedstock. It could also establish a key central point of operations in Manitoba for Blackstone to potentially consolidate its existing nickel interests in Manitoba, as well as other nickel assets in the region.
In addition, it’s location in the tier-one jurisdiction of Manitoba, with access to 100% renewable power, aligns with our goals to produce Green Nickel™, meaning that Wabowden ticks all the boxes that are important to our goals and the project would be complementary to the strategy we are executing. Wabowden’s location in Manitoba also could secure a nickel feedstock that is compliant with the United States’ Inflation Reduction Act, which is also attractive as demand for battery-grade nickel continues to increase.
Blackstone’s strategy is to progress a much larger scale operation better suited to the large-scale resource and by changing mining methods and leverage existing infrastructure develop a potentially globally significant nickel mine, capable of completely filling the nickel concentrate requirements at Ta Khoa.
We are also delighted by the attractive acquisition option structure and terms we have secured which provides Blackstone considerable operational leverage and value.
Securing long term low carbon IRA compliant nickel feed for the Ta Khoa Refinery has been a key question from potential JV Partners. This option agreement provides greater certainty over the nickel feed sourcing strategy for Ta Khoa, which is an important factor in the selection of a JV Partner, and the Company will provide an update on this soon.”
Click here for the full ASX Release
This article includes content from Blackstone Minerals, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
Canadian North Resources
Overview
Canadian North Resources (TSXV:CNRI, FSE:EO0) is a mineral exploration and development company advancing a critical minerals project in Nunavut, Canada. The Ferguson Lake property has, through the years, gone through more than 200,000 meters of exploratory drilling and has proven critical mineral deposits. Canadian North Resources is a relatively new market player with a tight shareholder structure and 65 percent insider ownership.
Nunavut is an emerging major mining district in Canada that has received minimal attention in the past. Miners have historically focused more on Ontario, Quebec and BC, but Nunavut is now gaining more attention as new discoveries are made. The global transition to clean energy is driving demand for critical minerals and creating the need to secure domestic supply chains in stable jurisdictions. Nunavut is emerging as a new frontier for exploration and mining of these critical minerals.
Ferguson Lake is a historical asset dating back to 1952, with C$160 million already invested in the project since its inception. These investments include infrastructure, metallurgy, drilling and exploration. The asset contains known deposits of critical minerals, including copper, nickel, cobalt, platinum and palladium.
Canadian North Resources updated Ferguson Lake’s historical 43-101 resource estimate in June 2022. The company successfully surpassed its 20,000-meter drill program, completing 21,126-meters in 2023.
With data from the last three years of drilling campaign, Canadian North Resources plans to further update the 43-101 and take the inferred resources to the indicated category, all while moving toward a pre-feasibility study (PFS).
A seasoned management team with expertise throughout the natural resources industry leads the company, with experience in geology, metallurgy and international business administration.
Company Highlights
- Canadian North Resources is an exploration and development company with a prolific critical minerals asset in Nunavut, Canada.
- The company has a tight shareholder structure with 65 percent insider ownership.
- Canadian North’s Ferguson Lake asset has undergone more than 200,000 meters of drilling since its discovery in the 1950s.
- Nunavut is an emerging mining district due to its critical mineral deposits that are rapidly growing in demand as the world transitions to clean energy.
- Canadian North Resources updated the historical 43-101 resource estimate in 2022 with an indicated 24.3 million tonnes and inferred 47.2 million tonnes of ore.
- The company has commissioned SRK to conduct a new mineral resource estimation following National Instrument 43-101 Standards of Disclosure for Mineral Projects for its Ferguson Lake nickel, copper, cobalt, palladium and platinum project to incorporate the results of 39,270 meters of new diamond drilling in 145 holes completed by the company.
- Canadian North Resources plans to proceed with a PFS as it moves toward development.
- The Ferguson Lake project contains known deposits of several high-demand critical minerals, such as cobalt, platinum, copper, nickel and palladium.
- An experienced management team with a track record of success leads the company.
Key Project
Ferguson Lake Project
The company’s critical minerals project covers 253.8 square kilometers and includes known deposits of nickel, copper and PGM. Canadian North Resources is currently working towards additional drilling and testing as it moves toward a PFS and, subsequently, a preliminary economic assessment. Once complete, the company will work towards bringing the asset to production.
Project Highlights:
- Prolific 43-101 Resource Estimate: Ferguson Lake’s 43-101 compliant resource estimate describes prolific deposits throughout the asset.
- Indicated 24.3 million tonnes of ore, including:
- 455.36 million pounds of copper
- 321.43 million pounds of nickel
- 37.5 million pounds of cobalt
- Inferred 47.2 million tonnes of ore, including:
- 946.92 million pounds of copper
- 551.5 million pounds of nickel
- 62.43 million pounds of cobalt
- Indicated 24.3 million tonnes of ore, including:
The company has commissioned a new mineral resource estimation following National Instrument 43-101 Standards of Disclosure for Mineral Projects for its Ferguson Lake nickel, copper, cobalt, palladium and platinum project to incorporate the results of 39,270 meters of new diamond drilling in 145 holes completed by the company.
- Significant Historical and Recent Work Completed: The asset has undergone decades of exploration and drilling and is now nearing production:
- Ferguson Lake was initially claimed in the 1950s and received 173 drill holes totaling 30,000 meters in the following decades.
- Between 1999 and 2012, an additional 158,528 meters were drilled in addition to significant exploration surveys and metallurgical test work.
- Canadian North acquired the asset in 2013 and completed 18,144 meters of drilling in 2022, updated the resource estimate, conducted additional exploration campaigns and commissioned NI 43-101 Technical Reports.
- Potential to Expand Known Deposits: Results from a newly completed drill campaign indicate that known resource deposits can be expanded, with 68 new holes hitting mineralized zones. These new results will be included in the new data set for the updated mineral resource estimate.
- 2023 Diamond Drill Program Assay Results: Sixty-nine out of 78 holes intersected semi-massive to massive sulphides containing nickel, copper, cobalt, palladium and platinum, and more than 3,200 samples from the remaining 57 drill holes were submitted to ALS labs. Results include up to 10 percent copper, 1.81 percent nickel, 8.65 grams per ton (g/t) palladium, 4.43 g/t platinum, 0.186 g/t rhodium, 2.19 g/t gold and 49 g/t silver.It also confirmed near-surface massive sulfide zones of up to 31 meters and underneath PGM-enriched low sulfide zones of up to 36 meters. The 2023 drill program expanded the mineralized zone along the strike for 1,500 meters covering 800 meters in the West Zone and 700 meters in the East Zone.
Massive sulfide ore at the surface of the West Zone
Management Team
Lee Q. Shim - Chairman and Director
Lee Q. Shim is a Canadian entrepreneur and investor with over 36 years of experience in businesses operating in Canada and overseas. In 1984, Lee founded the Lee Li Group in Toronto, operating as a food distributor and wholesaler of premium meats. He later built state-of-the-art food processing and beverage manufacturing plants to provide high-quality healthy products. With his dedication and vision, he continuously reinvested in the companies by automating facilities to maximize efficiency where possible, enhance service and support long-term stability and sustainable growth. His success has yielded long-term relationships with established companies and brands such as Walmart, Coca-Cola, Loblaws, KFC, Wendy’s, Sobeys, Metro, Costco, Minute Maid, Earth’s Own, Sysco Canada and Gordon Food Service.
Throughout his career, Lee has diversified his portfolio with long-term investments in Canada, the United States, China, and Southeast Asia. His portfolio includes high- and low-rise residential developments and commercial shopping centers, medical infrastructure and facilities, medicare services, food and beverages manufacturing, cold storage warehousing and distribution logistic centers, and wood veneer manufacturing. He is a partner in a private equity firm and has served as a director (often as a significant shareholder) in private and publicly listed companies, capital funds as well as in many successful ventures. As a venture capitalist, he has raised significant capital to fund projects around the world. In July 2020, he was appointed a director of Enercam Exploration, a subsidiary of Angkor Resources.
Kaihui Yang - President, CEO, and Director
Dr. Kaihui Yang has over 30 years of experience as an exploration geologist developing resources within discovery, resource definition, feasibility and mining stages. Early in his career, he was a research scientist in the department of geology at the University of Toronto and also served as a senior consultant for Canadian mining companies (Barrick, Inco, Falconbridge, etc.) and the World Bank Group.
Yang has been an independent consultant and director for several major Chinese gold companies and many Canadian mining and investment companies. He previously served as executive vice-president of exploration and international operations for the Zijin Mining Group, a diversified mining conglomerate listed on the Hong Kong and Shanghai stock exchanges (more than C$540 billion market cap). He also served as the chairman for the Sprott-Zijin Joint-Venture Mining Fund, an offshore gold mining fund focused primarily on equity and debt funding for precious metal and copper mining companies.
Yang was also a founder and president of a Canadian public company that conducted mineral exploration in China and won the Prospection and Exploration Outstanding Achievement Award from the China Mining Conference in 2011. He also served as the chairman and general manager for several Chinese-foreign joint ventures.
Yang studied geosciences at the University of Toronto, Chinese Academy of Geological Sciences, and obtained his PhD in Geology in 1990 from the China University of Geosciences (Beijing). He has published numerous articles and conference papers, many focused on massive sulphides, metal-rich-magmatics, and regional precious metal potential and exploration. He is active in associations such as the Society of Economic Geologists (Fellow), Australian Institute of Geoscientists (Fellow), and Prospectors and Developers Association of Canada (Core Member).
Trevor Boyd - Vice-president, Exploration
Dr. Trevor Boyd is a professional geologist with over 30 years of experience in the mining industry working worldwide as a consultant, qualified person, officer and director with both private and public companies. Since 1987, Trevor has worked with numerous mining companies for a variety of commodities on projects in North America, Asia and Europe. His experience includes base and precious metals, uranium, nickel-copper-PGM, and specialty metals projects including tungsten, tin and indium. He is a member of the Association of Professional Geologists of Ontario and the Northwest Territories and Nunavut Association of Professional Engineers and Geoscientists, and a qualified person as defined by National Instrument 43-101. Boyd has a PhD in geology from the University of Toronto (1996) and an MSc (applied) MINEX degree from McGill University (1988).
Carmelo Marrelli - Chief Financial Officer
Carmelo Marrelli brings more than 20 years of financial reporting experience, specializing in management advisory services, accounting, and financial disclosure. Marrelli is the principal of The Marrelli Group of Companies that provides corporate, financial accounting and reporting services in the Canadian capital markets. Over his career, Marrelli has been director and held senior financial roles in private and publicly listed companies across many industries including mining. He takes a value-based approach as a chartered professional accountant with his expertise spanning all phases of capitalization and growth. Since 1999, Marrelli has been a member of the Institute of Chartered Professional Accountants of Ontario and has been a member of the Institute of Chartered Secretaries and Administrators since 2000. He holds a Bachelor of Commerce from the University of Toronto.
Aier Wang - Director
Aire Wang is the founder of Guangdong Grandee Investment Group. and is currently the executive director of the group. Since Wang started her own business in 1991, she has successively founded Dongguan Loyal Woods Industry, Guangdong Hopson Wealth Financial Leasing, Dongguan Golden Valley Credit Investment Consulting, and Guangdong Grandee Real Estate Development.. Grandee Group was founded in 2011 by integrating all the companies founded by Wang. Grandee Group focuses on investment management in real estate, commercial real estate, finance, health and the wood industry.
Wang has been responsible for the management of family businesses including Dongguan Xingye Finance Guarantee and Kanghua Renkang Hospital. Wang has more than 20 years of experience in investment management of real estate, commercial real estate, finance, health and the wood industry. Wang holds an executive master’s degree in business administration from Sun Yat-sen University.
Rick Brown - Director
Rick Brown has spent over 30 years in the financial capital markets in North America where he successfully completed numerous financings, mergers, acquisitions, and divestitures. Presently, Brown manages the China desk at Sprott Capital Partners in Toronto, where he is responsible for foreign and institutional client investments in the resource sectors across the Americas and Europe.
In 2001, Brown co-founded Osprey Capital Partners, a mid-market firm assisting mid-sized companies in all types of fundraising and M&A activities. Before this, Brown spent time with Scotia Capital Markets in New York, where he worked on some of the largest M&A and financing transactions at that time.
Brown holds a bachelor’s degree in economics and a master’s degree in finance.
Michael Weeks - Director
Michael Weeks has over 25 years in the power generation and resource industries. Mike was a founder, president and CEO, and is presently a director and executive VP of operations of Angkor Resources Corp. He has an engineering background and holds a First Class Power Engineering Certificate. Over his career, he has spent more than 14 years negotiating with governments, communities, and stakeholders in developing and implementing natural resource concessions.
In developing countries and communities, Weeks is instrumental in the implementation of training programs for local labor force development, skills and professional accreditation, and has made significant strides in self-sustaining community growth and enhancement. He was a founding director of a petroleum training company as well as two financial service companies.
He has an engineering background and holds a First Class Power Engineering Certificate. He has managed major projects in Canada, Asia, Africa, and Europe, including several major production facilities in North Africa.
Xian Jian Guo - Technical Advisor
Xian Jian Guo has over 35 years of experience in process development, plant operation, optimization, engineering, and project management in the mining and mineral industry.
He has successfully managed a number of large international mining/mineral projects with multi-billion dollar investments covering project evaluation, engineering, construction, and commissioning.
As a Canadian and professional engineer, Guo was a director at Hatch in Ontario and senior scientist at the Noranda Technology Center in Quebec. He has held several international positions, including technical director (for China) at Hatch Ltd.; and chief engineer of Zijin Mining Group.; vice-president of Ramu NiCo Management in Papua New Guinea; and director of the Metallurgical Department at Beijing Research Institute for Nonferrous Metals. He is currently a senior advisor with the Zijin Mining Group.
Guo obtained a PhD in Metallurgy from Kunming University of Science and Technology in China (1989) and completed postdoctoral studies at Mackay School of Mines at the University of Nevada in Reno, USA.
Stephen du Toit - Advisor
Stephen du Toit has over 30 years of experience spanning executive, strategic, tactical, and transformational and operational initiatives for manufacturing, product supply, and facility operations. His roles as EVP, VP, COO and in other executive positions encompass multinational operations in Canada, Saudi Arabia, Russia and other countries.
Before joining Coca-Cola in 1999, du Toit spent over a decade in the consumer goods industry with Diageo, Penguin Foods, SAB Miller, and Lever Brothers (Unilever). He joined Coca-Cola as manager of Country Supply Chain in Saudi Arabia and in 2000 was director, the Middle East Regional Supply Chain. From 2005 to 2011, as VP he headed up the Commonwealth of Independent States Cluster Procurement, Planning & Supply. In 2011, he became VP, of Manufacturing in Canada, lead Minute Maid Canada (2013 to 2015), then became SVP of Product Supply System, and is currently EVP and COO for Coca-Cola Canada Bottling Limited a newly created, independent bottler.
du Toit holds a Bachelor’s Degree in Commerce specializing in accountancy, statistics and computer science from the University of Pretoria. He is also a certified Chartered Management Accountant (CMA) and a Fellow of the Procurement Institute of Europe.
Getting Ahead in the Electric Vehicle Race
Committing to a sustainable future
In 2014, the EU committed to cutting carbon emissions by 40 percent by 2030. In the years that followed, it has expanded considerably on that commitment, announcing an ambitious long-term strategy to become fully climate neutral by 2050. The EU has also taken steps to both shore up critical mineral supply chains and support the development of clean technology and green industry.
While the EU was the first to set a framework for decarbonization and electrification, it was far from the last. In the years since 2014, many others have followed Europe's lead.
In Canada, for instance, there are multiple government-led decarbonization policies. The Canadian federal government has announced plans to replace combustion engines and require 100 percent of car and passenger truck sales in 2035 to be zero emission. It will require all new vehicle sales to be zero emission by 2040. Electric Mobility Canada, an industry initiative, aims to help the country reach 100 percent electric passenger vehicle sales by 2030.
At the province level, governments have instituted programs that will help reach environmental goals, such as British Columbia's CleanBC Industrial Incentive Program and Alberta's Carbon Competitiveness Incentive.
Governments are moving toward a gradual phase out of gas vehicles in favor of electric cars.
The US, for its part, launched the Inflation Reduction Act of 2022. Though primarily a means to reduce the national deficit and curb inflation, the act also introduced several clauses geared towards sustainability, including a goal of a 40 percent reduction in emissions by 2030, investment into domestic manufacturing and energy production, and expanded tax credits for the purchase and sale of electric vehicles (EVs).
These measures will, according to a press release from the White House, serve a few purposes. First, the Act's incentives will reduce the cost of both EVs and EV charging infrastructure. Incentivization is also expected to drive competition and consumer demand while accelerating the growth of the EV market. Lastly, the government intends to promote private sector investment and establish a stable domestic supply chain for critical minerals.
China, the country with the world's fastest-growing EV market, has also established multiple sustainability-focused initiatives. The Chinese government is investing heavily in EVs, with plans to build charging stations for 20 million EVs by 2025 while also constructing a fully electrified public transit system. These measures represent a cornerstone of China's carbon neutrality plan, which it hopes to achieve by 2060.
Other countries are also on board with the EV industry.
Indonesia plans to have 13 million electric motorbikes and 2.2 million electric cars on the road by 2030. The United Kingdom intends for all new cars and vans sold in the country to be zero emission by 2035. The Government of Japan announced similar plans for what it refers to as clean energy vehicles.
In search of adequate supply
The response from automakers to EV initiatives has been largely positive, with the majority of industry leaders embracing electrification. This is most evident from the heavy investment that companies like Tesla (NASDAQ:TSLA) and General Motors (NYSE:GM) have directed toward manufacturing infrastructure. For example, the US hosts nearly 30 EV factories and gigafactories in various stages of construction, with even more facilities dedicated to battery manufacturing.
Tesla alone currently operates five gigafactories worldwide, with plans to eventually increase that number to twelve.
Yet manufacturing is only half the equation; the other half is in the supply of raw materials that will feed it. Given the current rate of production, there is a looming global shortage of multiple materials crucial to EV production, including but not limited to lithium, graphite and copper.
While mining and exploration companies working together with governments have made great strides in addressing these deficits and establishing a stable domestic supply chain, it's still not enough. There are simply too many stalled, incomplete and slow-to-start projects. In light of this, EV manufacturers are increasingly taking matters into their own hands by establishing supply partnerships with junior mining and exploration companies.
These partnerships will impact the market for both critical minerals and battery metals, potentially causing further price spikes as manufacturers stake their claim on already limited supply. Moving forward, agreements between automakers and mineral producers could become standard practice — and even required to remain competitive in the EV market. The upside for exploration companies and their investors: these deals have the potential for considerable returns.
Paving the way to electrification
So why are EV manufacturers targeting exploration companies specifically?
As noted by the New York Times, established mining companies cannot meet the needs of the EV industry. Throwing in their lot with exploration companies gives automakers the opportunity to completely sidestep existing supply chains and gain exclusive access to the materials their factories require. These agreements represent something of a return to the automotive sector's roots, hearkening back to the days of Ford's (NYSE:F) Brazilian rubber plantations.
"We quickly realized there wasn't an established value chain that would support our ambitions for the next 10 years," Sham Kunjur, executive director of General Motors' EV Raw Materials Center of Excellence, told the New York Times. "It almost seems like 100 years later, we're back (to the early days of the industry)."
The majority of industry partnerships are focused on securing a supply of lithium, although other metals such as nickel, cobalt and manganese may also become targets in the near future.
There have been several prominent recent partnership deals, one of which is Liontown Resources’ (ASX:LTR) February 2022 deal with Tesla. Contingent on the company starting commercial production in 2025, the supply agreement promises roughly a third of the company's production capacity to the EV manufacturer. Liontown has also signed offtake agreements with Ford and LG Energy Solution (KRX:373220), with all three deals accounting for roughly 450,000 dry metric tons of lithium per year.
Nevada is emerging as a new lithium frontier with several promising projects underway.
In 2023, Lithium Americas (NYSE:LAC) signed a US$650 million equity investment deal with General Motors to develop the mining company's Thacker Pass project in Nevada. This deal represents the largest investment in raw battery materials by an automaker to date.
In Europe, Vulcan Energy Resources (ASX:VUL), which controls license areas in both Italy and the Upper Rhine Valley in Germany, currently maintains lithium supply agreements with Stellantis (NYSE:STLA), Renault (EPA:RNO) and Volkswagen (OTC Pink:VLKAF,FWB:VOW). It also has offtake agreements with LG Energy Solutions as well as battery materials producer Umicore (EBR:UMI).
Significant though they are, these agreements represent only a drop in the bucket. There are many other junior exploration companies that could serve as promising suppliers for automakers, including Grid Battery Metals (TSXV:CELL,OTCQB:EVKRF). In addition to several lithium development projects in Nevada, the company has discovered a promising nickel exploration region situated in Central British Columbia.
Each of the company's four projects is situated near extensive pre-existing infrastructure, ensuring that Grid Battery Metals can ramp up production in the short term with minimal capital investment cost. The Canadian exploration company also raised in excess of C$5 million in 2023 and has approximately C$9 million in working capital on its balance sheet.
Investor takeaway
With supply deficits growing progressively more severe, EV manufacturers have begun to take matters into their own hands, signing agreements with junior exploration companies to gain exclusive access to critical materials. This has resulted in significant returns for those companies and their investors — with more opportunities likely to come in the near future.
This INNSpired article is sponsored by Grid Battery Metals (TSXV:CELL,OTCQB:EVKRF). This INNSpired article provides information which was sourced by the Investing News Network (INN) and approved by Grid Battery Metalsin order to help investors learn more about the company. Grid Battery Metals is a client of INN. The company’s campaign fees pay for INN to create and update this INNSpired article.
This INNSpired article was written according to INN editorial standards to educate investors.
INN does not provide investment advice and the information on this profile should not be considered a recommendation to buy or sell any security. INN does not endorse or recommend the business, products, services or securities of any company profiled.
The information contained here is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. Readers should conduct their own research for all information publicly available concerning the company. Prior to making any investment decision, it is recommended that readers consult directly with Grid Battery Metalsand seek advice from a qualified investment advisor.
